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The Milwaukee streetcar, known as The Hop, travels along North Broadway in Milwaukee on Sunday, June 9, 2019. Photo by Mike De Sisti/Milwaukee Journal Sentinel (Photo: Mike De Sisti)

Milwaukee's proposed streetcar extension has been stuck in committee since May and is running months behind schedule — delays that put the funding source for the project at risk, the city's development commissioner says.

Mayor Tom Barrett announced in early May his plan to direct $46.8 million in tax incremental financing to the construction of an extension to West Wisconsin Avenue ahead of next summer's Democratic National Convention, and to preliminary engineering of extensions linking Bronzeville to the north of downtown and Walker's Point to the south.

"The opportunity to go both north and south is right in front of us," Development Commissioner Rocky Marcoux said. "The reason that we wanted to have the vote in May is so we did not lose time against the clock we’re really running against."

Instead, it's the special tax districts that would pay for the construction of the tracks heading north and south, he said. The route north to Bronzeville, in particular, is dependent on two tax incremental financing districts that expire in 2022 and 2024, rendering the funds unavailable after those points, he said.

City officials believe that the money will be available if the project moves forward now, he said.

"Continuing to move this vote is costing us time and ultimately will cost us money, and we do not want to find ourselves in a position where we are spending money to design something that we then find out we don’t have the money to build," he said.

Tax incremental financing districts defer adding the value of new developments to the property tax base until project funding is paid. The maximum life of tax incremental financing districts is between 20 and 27 years, according to state law.

The city previously laid out a timeline in which the city Redevelopment Authority Board would take up the proposal on May 16, the Zoning, Neighborhoods and Development Committee would adopt the resolution on May 21 and the Common Council would give it the green light on May 29.

It got only as far as the committee, where a series of questions from aldermen prompted the committee chairman, Ald. Khalif Rainey, to delay a vote in order to allow time to get answers.

He doesn't expect the issue to return to his committee until July 23 — the final cycle before the full Common Council recesses for the month of August.

He said he thinks the public is interested in seeing the issue move forward, and he would like to allow that vote to happen.

2 key aldermen remain holdouts

But two key aldermen on the committee — José Pérez and Russell Stamper II — say concerns they raised in May haven't been addressed and they could remain holdouts.

Pérez said that he hadn't heard from Barrett's office, the Department of Public Works or the Department of City Development about any plans to extend the proposed new line past South 1st Street and West Pittsburgh Avenue.

Pérez has called for extending the line to South 6th Street and West National Avenue to reach farther into the Latino community.

"I’d like to see a stronger, firmer plan for analysis and engineering of a southern route and until then I’ll continue to hold my vote until I figure that out," he said.

The proposal before the committee includes $500,000 in local tax financing to study future routes into Walker's Point.

Marcoux told the committee on May 21 that there are only two tax incremental financing districts in Walker's Point that could be leveraged and those alone couldn't be used to pay for the construction of a route south.

Stamper, whose district is northwest of downtown, said if he is going to support the measure, it must benefit the entire city.

"I'm not clear on my support because they're not clear on fulfilling all my requests," he said Tuesday.

A fund to protect households in the central city from gentrification and displacement is a top priority for him. While downtown development is booming, the nearby neighborhoods are struggling with quickly increasing property values, he said.

"It's not helping those residents, so that fund will be great for the area of the city and we won't have to worry about gentrification," he said.

Marcoux said the city has accounted for a number of the issues discussed at the May 21 committee meeting, including the potential to consider an anti-displacement fund.

"I believe that everyone that has been involved in those conversations has been acting in good faith in terms of potential to get all those items moving, but the key issue here is why is the streetcar vote not being held?" Marcoux said. "This is the largest public works investment the city will have ever made in the neighborhoods."

Critics question streetcar's viability

As negotiations over potential future extensions play out, the city's handling of funding for the existing route has also drawn criticism.

Last week, Department of Public Works officials said fare collection equipment hasn't been ordered, so rides on Milwaukee's streetcar will remain free longer than originally planned.

Dave Windsor, DPW streetcar system manager, told members of the Public Works Committee officials knew ridership would drop once they started charging fares and that they are trying to avoid spending money on equipment that they hope to not have to use.

The goal is to continue the free fare policy in 2020, filling any gap in the budget with additional sponsors, advertising and grants, he said. He estimated that the funding gap in 2020 currently stands at between $1 million and $1.5 million.

"We are confident that we will start to generate more revenue through ads and sponsorships in the near future," he said.

Windsor said if new revenue doesn't come through, the city's parking fund would be the fallback.

Critics on the Common Council seized on those comments.

"People are going to find out that we don't have the money for the expansion," said Ald. Tony Zielinski, who is planning a 2020 mayoral run. "We can't do it. We're looking at a 1 to 1.5 million dollar shortfall unless somebody comes in and magically gives us some money."

Alds. Bob Donovan and Mark Borkowski joined Zielinski in a joint statement contending Windsor's revelations brought to light what they and other streetcar skeptics had known or suspected: That local tax dollars would have to be used to pay for the streetcar's operating expenses.

They said parking fund dollars have been allocated to the city's general fund in previous years to pay for city services that benefit all residents. Diverting funds to the streetcar would impact funding for the police and fire departments, infrastructure repairs, plowing and salting roads, and replacing lead service lines to homes, they wrote.

Zielinski called Milwaukee "a tale of two cities."

"The massively expensive streetcar dramatizes how our neighborhoods have been neglected," he said. "Extreme poverty is one product of that neglect."

Zielinski said the entire city, including downtown, would be better if the neighborhoods and poverty were prioritized.